SelfTrade - Client Money or Deposit

cloud_dog

Anyone else with SelfTrade and received the communication regarding opting for your cash to be held as 'Client Money' or Deposit' (with SelfTrade)?

From my limited understanding it all really comes down to FSCS protection, i.e. on deposit with Selftrade you have the £85k protection (but you know where your cash is and how much); with Client Money you still have the £85k protection per individual financial institution but SelfTrade distributes this money across multiple FIs (none held in SelfTrade) and therefore whilst your £85k protection is there ita a bit of a gamble because you do not have knowledge of the FIs.

Example: If you stickwith Client Money and just happen to have £85k with FI 'A' and SelfTrade has 20% of your cash with FI 'A' you will not have know,edge of this and so your 20% is not protected.

Whilst the idea of Client Money is attractive because ST distribute it the lack of clear info on where your money is distributed at any one time raises the risk on a personal elvel for additional cash on deposit.

So...... For easy of understanding where your cash is, what protection you have are people going to opt for 'Deposit'??

Thnaks

Xbigman

I have this letter and skimmed it. My understanding is that;

DEPOSIT means the bank has the money and can use it as part of their balance sheet but you get FSCS protection.
CLIENT MONEY means that you retain 'ownership' of the money and its held in a separate account. Should the bank go under its still your money and creditors can't have it.

So my choice is client money (IE no change).





X

cloud_dog

Hi Xbigman....... As far as I am aware both options retain the FSCS protection as that is FI related, albeit that with client money it is distributed across a number of FIs and not held with SelfTrade.

Obviously with deposit if Selftrade go kaput then you lose your money (subject to the £85k FSCS protection).

I'm not in a position where the £85k cash limit bothers me atm (wish it did) but from what I can see going with 'client money' means you do not know where the (your) funds are held and if a FI should go kaput which you have cash on deposit with as well as some of your Selftrade cash you may find that you have unwittingly gone over the £85k limit per FI.

designdef

The letter also points out "if you open a Cash ISA when it becomes available... cash balances will have to be held as a Deposit" this may help your decision. I would most likely want to swop my current account over (if that becomes available) but nothing is mentioned about this in the letter.